Are you able to switch modes ok on the LCD using the pushers? Jarl was kind enough to find out a link to the relevant catalogue on OnTheDash when I first got my Twin, so I'll repeat the favour:

http://www.onthedash.com/Guide/_Catalogs/1978_Catalog/?show=10.jpg

I found it help me understand what the watch was showing me in its various modes more quickly than figuring it out for myself! In this case, though, we're using it more to test that the connection from your pushers to the module are ok.

In chronograph mode, it's right that the two dots should flicker, it's all part of showing the timing but it should be a regular pulse rather than something random.

The jumping around I don't like the sound of at all. To be honest, it doesn't sound like you're doing anything wrong at all and the LCD module is playing up and maybe on the verge of giving up :(

Still, worth trying the connections as above, we don't see very many of these at all. I was second highest bidder on a black-dial version on eBay before I won mine early in 2007 and Nic had one for a while, but I think those three are about all I've seen in four years or so of collecting. Which version is yours, would love to see some pics.

Good luck with trying to get the LCD sorted but even if you can't, I think you have an interesting watch in the Twin.